Question

The 1990s saw an unprecedented amount of business combinations, also known as mergers and acquisition. Locate a company that was involved in a business combination. How is this company performing today? In your opinion, is this company better or worse off after the combination? Explain.

Answer 1

Answer:-

In November 1999, a hostile takeover bid from the British mobile phone group Vodafone AirTouch for German telecommunications and engineering group Mannesmann AG, led to a broad debate on the future of the German model of capitalism.

On 19 November, the Mannesmann supervisory board confirmed the management's position and officially rejected the Vodafone offer.

At the same time, however, the British telecommunications group came forward with a new improved proposal, which appeals directly to the Mannesmann shareholders to exchange their shares in the ratio of 53.7 Vodafone AirTouch shares for one Mannesmann share.

Since the Mannesmann management and supervisory board continued to argue against the takeover, the Vodafone offer represented the world's largest-ever unsolicited bid.

Esser's counterpart at Vodafone, CEO Chris Ghent, pushed the offer higher and higher. It quickly rose to almost 125 billion euros – a record sum at the time.

It's been 10 years since British mobile operator Vodafone successfully acquired the German firm Mannesmann in a hostile takeover worth billions.

2. But how did Vodafone end up on top?

How Vodafone performing much better and ended up being on top?

Explanation:-

It was the era of dot com euphoria and internet hype.

Technological advancement was proceeding at a new record pace and few German companies were in a better position to take advantage of this new trend than Mannesmann.

Mannesmann- was a Dusseldorf-based firm that originally made a name for itself by producing seamless steel tubes.

In May 1999, Klaus Esser was given the top job at Mannesmann. Esser had long been pushing for a reorientation of the company from an industrial firm to a service and telecommunications provider.

At the time, Mannesmann held controlling interest in D2, Germany's second largest cellular network, which was outperforming all of the company's other segments and Esser planned to broaden that success by branching out across Europe,

In October 1999, British telecommunications group came forward with a new improved proposal, which appeals directly to the Mannesmann shareholders to exchange their shares in the ratio of 53.7 Vodafone AirTouch shares for one Mannesmann share. .

Esser told international stock holders that the combined Mannesmann D2/Orange operation was forecast to grow by 30 percent each year through 2003.

He claimed that such growth prospects and "simple mathematics" made it clear that Mannesmann shareholders should stand by his team and reject the Vodafone offer.

Esser based this growth projections on the technical supremacy of Mannesmann over Vodafone

Esser saw that his chances of resisting Vodafone's bid were fading. The clincher came when Mannesmann's largest shareholder, Hong Kong-based company Hutchison Whampoa, urged him to agree accept Vodafone's offer.

On February 3, 2000 Klaus Esser and Chris Ghent buried the hatchet and effectively sealed the deal with handshake at Mannesmann headquarters in Dusseldorf.

After sucessfull takeover of Mannesmann by vodafone group, all the forecast by Esser came true and company earned tremandously, generating huge profit and aquiring greater market in europe,

and after that they come up with lots of serives and ended up being on top.